Everything else is the same: the technology, the knowledge, the infrastructure. Then why is it that some businesses excel more than others? It is that one masterstroke which makes all the difference! Outsourcing your accounting/ bookkeeping has proved to be one such masterstroke for many.
It is a general perception that outsourcing means cost saving. However, it is much more than that! Here are some of the benefits of outsourcing one’s accounting/ bookkeeping works:
When you outsource your accounting work, you outsource it to a highly skilled team. Employment costs of salaries, training, recruitment, benefits to such staff, would be much higher than the cost of outsourcing your work to a specialised team.
For eg, in the UK the basic hourly rate for bookkeeping is approx £15 per hour, apart from other benefits and overheads. In the US, the rate varies from $20-$50 an hour.
Outsourcing this work brings down the cost to approx $8-$15 an hour, depending upon the volume and nature of the complexity of work involved.
For businesses opting for outsourcing of their accounting work, this is one of the biggest benefits. We all know that running a business requires great effort and time, to grow and nurture it. Then why not outsource non-core activities and get rid of the irksome cycle of hiring, training, reviewing, managing, and so on.
This gives the business owners more time for productive activities like marketing for client acquisition and improving operational efficiencies.
The time differences due to different time zones act as a boon in disguise. It ensures that work does not get restricted to the working hours of your country. While you are relaxing after a day’s hard work, someone sitting in another country is updating your books. This translates to greater control over your financials since work’s done on an almost real-time basis.
An accounting/ bookkeeping firm pay great attention to the pre-screening of their employees and train them to make them specialised in their fields. Since a business has many aspects to take care of, it may be financially unviable for them to recruit such highly trained staff, or to train existing staff. Hence, outsourcing gives an opportunity to the business to avail the benefits of a higher level of expertise at reasonable costs and lesser time. This helps increase the efficiency of the business.
Outsourcing specific areas of work can help the accounting firm concentrate more on greater marketing efforts for client acquisition, as well as more critical areas of accounting, which haven’t been outsourced. Outsourcing accounting and bookkeeping can reduce your costs by 30-50% or more.
When you outsource your work on an hourly basis or project basis, not only is the basic cost much lower than an onshore employee, but you do not have to pay for other employee costs like overheads, paid leaves, employee taxes, and other employee benefits. In this kind of a scenario, it is suggested that an onshore employee is made the point of contact for the outsourcing firm so that matters which need direct client interaction can be handled by the employee, and the rest is taken care of by the offshore team. This helps improve the profit margin of the accounting firm considerably.
When you outsource your accounting or bookkeeping tasks, you have at your disposal an entire team of trained and experienced staff. Hence, in case of a sudden increase in workload, service delivery capability shall not be a concern for you.
However, the same is not true if the accounting firm solely relies on onshore employees, since neither is keeping standby employees financially viable nor is recruitment process quick or inexpensive.
Due to time zone differences, your client’s books get updated even during your non- business hours. Hence, it’s like running your firm 24 hours a day, resulting in the more timely completion of work, and highly satisfied clients.